Beersheba Porter Cain, wife of McMinnville merchant John Cain, followed a mountainous Grundy County pathway in 1833 and discovered the chalybeate spring that would come to bear her name. The bluff site high above the Collins River Valley became the home of this noted antebellum watering place.

The state of Tennessee authorized the construction of a first class road to the mountain in 1836 and by 1839, Beersheba Springs had incorporated and begun official operation as a summer resort. A small hotel was built, along with a row of log cabins. The somewhat primitive establishment benefited from the stagecoach traffic along the new road running from McMinnville to Chattanooga. Cabins sprang up as well-to-do local families discovered this idyllic haven and began making annual treks.

The acquisition of the property in 1854 by Colonel John Armfield, a Louisiana slave trader, ushered in a period of intense development that gave the mid-nineteenth century cottage community its present flavor and layout. Armfield is thought to have brought around one hundred slaves to the area to complete his improvements. The new luxurious hotel that was constructed, along with the cabins and grounds, could accommodate four hundred guests. At that point, twenty cottages were perched on the grounds. Louisiana planters had followed Armfield to the region to escape the summer swelter of the lowlands. Two cottages were built for Bishops James Otey and Leonidas Polk as Beersheba Springs vied for the Episcopal university that would be eventually be located in Sewanee.

From the wooden observatory at the front of the hotel Confederate and Union activity in the valley below could be watched as the Civil War engulfed this region and this exclusive way of life. The constant threat of raids and plundering unsettled the area. By the close of the conflict, the "old order" had faded away. Beersheba Springs passed into the hands of Northern investors.

Though the resort reopened in the 1870s, it never recaptured its former glory. The United Methodist Church acquired the Beersheba Springs hotel in 1941, and after extensive repair work and some limited improvements, began to use it for assembly and summer camp. In 1980, the historic district of the town was placed on the National Register of Historic Places. The antebellum atmosphere of Beersheba Springs remains in its numerous nineteenth century structures and its lasting ties to prominent Southern families.

Since 1969, Beersheba Springs has hosted the Beersheba Springs Arts and Craft festival each year on the fourth weekend in August. The craft fair is held on the grounds of the United Methodist Assembly at the Beersheba Springs hotel. This festival of handmade crafts draws thousands of people from around the area and close to 200 vendors from several states. The proceeds from vendor fees and food sales go to benefit locals charities in the community including the Beersheba Springs Volunteer Fire Department, Rescue Squad, local elementary schools and nursing facilities, as well as payouts to personal tragedy victims throughout the year.